NAB paid $200,000 bonuses to traders

At least two of the four National Australia Bank traders who ran up a $180 million loss through unauthorised trades received bonuses of $250,000 and $200,000 less than a month before they were suspended on Tuesday, according to sources.

The traders' boss, Gary Dillon, NAB's global head of foreign exchange, is believed to have received a bonus of $500,000.

The bank said yesterday the bonuses would have been paid for performance over the year to September 30.

"All staff at the National get paid their annual bonuses in January (for performance) up to the end of September, and we have said that this unauthorised trading occurred after September, so the bonuses they received in January, if they received any and I don't know that, are for the previous year," NAB spokesman Robert Hadler said yesterday.

Mr Dillon hired traders Luke Duffy and David Bullen and is believed to be a close friend of Mr Duffy.

Mr Dillon is not suspected of having any knowledge of the trading but the bank yesterday moved to rule him out of playing a role in the internal investigation team.

It is believed that Mr Dillon will provide information to the review, as will the head of NAB's institutional and corporate bank, Ian Scholes, and head of risk management Chris Lewis.

However, none of the three executives will conduct the investigation.

Mr Hadler said yesterday the bank's internal investigation would be chaired by NAB chief executive Frank Cicutto and led by a seconded forensic expert from PricewaterhouseCoopers.

Mr Dillon is directly responsible for the four traders, including Mr Duffy and Mr Bullen, who ran up losses during a four-month period from last October. It is believed that Mr Duffy received a $250,000 bonus and Mr Bullen a $200,000 bonus at the start of January, just weeks before they were discovered tricking the NAB system into thinking they had made profits trading call options on the Australian and New Zealand dollar.

One of the traders' colleagues on Monday discovered the men had racked up losses by taking massive positions on the currencies that proved to be wrong.

Mr Dillon was unavailable for comment yesterday.

Mr Hadler said he would make no comment about individual NAB employees.

It is believed that Mr Dillon and Mr Duffy had known each other since the mid-1990s when they worked together at Commonwealth Bank's institutional bank.